Vinod, I agree that there is no end to work… but the transition will be heartbreaking for many more people across a shorter time frame.
Also, the UBI is not just about underpinning workers.
It is about fundamental human rights.
As you probably know, around 50% of the population has no direct access to income: young, old, incapacitated and their unpaid carers, as well as ‘unemployed’.
While the percentage is relatively static, membership of the group constantly changes: the young grow up, the old die, the incapacitated get well or die, their carers go back to work, grow old and die, as do the unemployed (most finding jobs within 2 years).
The problem is that without money, it is not possible to signal your needs to the market. This disenfranchises those without money, and also limits the turnover of businesses that could supply the needs.
This group of course gets money from a range of sources:
- Family — but fraught in the case of those in families on low income or without income or who are in work without job security or part time or casual or all of the above.
- Charity — which creates second class citizens and costs money to administer and is never certain as it depends on the generosity of others
- Tax/welfare — similar to Charity, but also requires requires someone to make a moral judgment about you — do you deserve help, and how much with high marginal tax rates (as a result of reducing benefits as income goes up) acting as a disincentive to look for work, especially if you may lose it and have to go back onto the ‘welfare’ merry go round of proving you again qualify for help
- Crime- a rational response to exclusion
The UBI offers a way to put a floor under everyone, making it easy to take work when it is available, while balancing the needs of the family.
This does not need to be funded. it can be created by the Central Bank for payment to everyone, just as money was created to fund QE, and just as it is created to fund new bank loans.
The money would circulate into the broader economy as it is spent, boosting turnover, the salaries of higher paid, and profits. In the main, the money would be extracted from the real economy as the higher earnings are invested in the financial economy.
The only concern is the potential for inflation, but this is mitigated by globalization and automation, as well as the shift of money from the real economy into the financial economy (where it boosts asset prices, but not consumer prices).
If inflation does become a problem, a flat % tax can be levied on transactions in the real economy to damp demand, with the higher paid pay more tax based on the extra earnings they accrue from the input of the UBI.